In Iraq, we're based outside of the International Zone. We provide security escort services.

We're sitting here in the Red Zone.

Yeah. We're sitting outside of the protected International Zone.

Tell me a little bit about the threat level right now.

The threat posture at the moment is very high. The country is not particularly stable, and that's because of the Anti-Iraqi Forces' desire to see the new government fail. They want to destabilize the country, because although the Shi'as here in Iraq are the majority of population, they're not the majority in the rest of the Middle East. And there's a desire by the Anti-Iraqi Forces to see the government fail.

Immediately, though, in the last few days, you've had quite a few incidents. So that's elevated the threat level as well?

The threat posture has gone up. There are peaks and troughs. And it seems to me that the time that I spent here, which is five months, is that you'll typically [see] a lull period where the Anti-Iraqi Forces will regroup.

A 24-year veteran of the British Army, Melville heads operations in Iraq for the British security company Erinys, which has a $50 million contract to protect the U.S. Army Corps of Engineers. Erinys also held a $100 million contract to protect Iraqi oil infrastructure until December 2004, when the job was turned over to the Iraqi oil ministry. Here he recounts several harrowing incidents in which Erinys personnel were attacked by Iraqi insurgents and describes how the March 31, 2004 ambush of the four Blackwater contractors in Fallujah changed Erinys' security posture. Melville also talks about the Regional Operations Centers (ROCs), which are intended to coordinate private contractors in Iraq. The ROCs are administered by Aegis, a British private security firm. While Melville admits the coordination is "useful," he also expresses the concern shared by many private security contractors that providing information to Aegis may give the company a competitive advantage. "What we do is classified," he says. "We don't wish other security companies to know what our clients are, where we're operating and how we're operating." This is the edited transcript of an interview conducted on April 21, 2005.

Better known as the insurgents?

The insurgents, yeah, where they regroup. Then there will be a spike of operations where there's a huge amount of bombings, a lot of shootings. And then when they exhaust themselves, then there's a lull again. It seems to be a continuing cycle. And at the moment, we're going through a cycle which hopefully is at its peak and will start dropping very soon. But we are on elevated threat at the moment. …

How many people do you have operating? And what kind of coverage geographically do you have here?

Well, Erinys Iraq is spread over the entire country. We've got outposts from right up by the north of the country, right in the Peshmerga area, by Dahuk, and all the way down south through to the bottom of the country in Basra. We've got two major clients and several clients that nevertheless are still very important to us. Our key service is providing security escort teams to the United States Army Corporations of Engineers, and we carry their civilian engineer contracted staff and their civilian engineer employees to and from the reconstruction sites. And then we're providing another service to a major American construction company that is rebuilding the infrastructure of the [country].

You got a big contract back in August of 2003 and reports are a $100 million contract to do protection of oil pipelines.

Yeah, that is correct. It's not a secret at all. It's very widely known that at that time, Erinys was awarded the largest-value security contract in Iraq. We very, very quickly mobilized, trained and deployed an oil protection force of 15,000 men. It was coordinated and managed by an expatriate management structure of around 250 staff. It's true to say that they were very well managed and organized. They had a vehicle fleet of over 250 vehicles. They had two aircraft … to protect the pipelines that flew continuously.

And we protected just a portion of the Iraqi oil, gas and refined products of pipelines. The force was very, very successful, well managed and well led. But it became uncomfortable for the … government to have this force controlled by a private security company. So the contract, when it came to its end, was successfully handed over to the Iraqi Ministry of Oil.

They determined it was a bit politically incorrect?

Well, I'm not saying that it was politically incorrect, because the force was successful in protecting the pipelines, but the desire of the Iraqis under their Iraqization program was to have command and control over this force. …

You were a relatively small company until that contract came along. Is that correct?

It's true to say that that was our signature contract. Yes, it was, here in Iraq.

So how do you go about convincing a client, when you're small like that, to give you such a huge piece of the action?

It's because of the quality and the strength of our management team and the quality and strength of our supervisory team. Our recruitment doctrine is that we recruit experienced and seasoned, usually former military or policemen; they stand up and manage the particular parts of the contracts to which they're best suited. And that strategy of recruiting experienced and seasoned managers from a previous military or law enforcement background has paid off with, of course, the excellent direction that is given by the senior management of the company.

Have you got people of all nationalities?

Yes, we do. On the particular contract that I'm running for the company, I've got probably about 120 South Africans; I've got around 85 British; I've got around 38 Americans. And then the last portion, they're all different groupings of nationalities from all over the world. I've got some Polish, a couple of French, Canadian, and so on. We also employ a large group of Iraqis. On the particular contract that I run, there aren't any, but Erinys does have more than 300 Iraqi people employed on variety contracts. And we're very pleased and proud that we're able to interact with the Iraqi people to contribute to the economy in that way, and also provide them with high-value training.

In a briefing, I noticed before getting into the car, I'm told the driving is going to be aggressive.

Yes, it is. Perhaps it's not the best use of terminology. The driving has to take that posture when the risk threat is high, and we do change our driving staffs to meet the threat. As I said to you, the risk threat is high. You said yourself that you're aware of the suicide bombings that blew up security teams just yesterday. And we're very, very cautious of civilian vehicles approaching our motorcades, because the suicide bombers use motor vehicles to do that. And so to stop the vehicles getting into the motorcade, they are necessarily blocked to protect the lives of the clients and to protect the lives of our own men.

And it's not just Erinys that are carrying out these tactics, stratagems and procedures. It's also all of the companies that are able to train themselves. So it's necessary to save life. And, in fact, it is recognized by the Iraqi police and the government that these measures are necessary at the current time.

Some of their citizens have criticized these PSD teams, these private security details, as making more enemies than friends.

That is a concern. I'm not prepared to comment on other companies, but what I will comment on is Erinys Iraq. And we have in place a redress system and a redress procedure, whereby if any Iraqi citizen feels that they've been harmed or injured in some way, they can approach the company. There is an investigation and a settlement process. And, in fact, where we've been at fault through our driving styles, we've actually paid compensation to Iraqi citizens. And I don't know if we're the only company that does that, but we do do that.

Who are you accountable to?

We're accountable to the Coalition forces. We have a contract with the United States [Army] Corps of Engineers, which is through the American Department of Defense. Most of the contractual stipulations are based on Army regulations, and they actually quote Army regulations, and we have to follow our contract very, very closely.

There's a whole contracting team that monitors what we do. We comply with rules of engagement, rules for the use of force, rules for detention and arrest. We have our own company policies and procedures. The individuals all have a job description, and we have a code of conduct, and we have our own internal disciplinary processes and procedures which are based on the British Army. And we're a very, very professional and disciplined company that is fully accountable, not only to the American Department of Defense and to our own contracting team, but also to the United Nations through The Hague.

Why does the U.S. Army Corps of Engineers need you? Why not just use U.S. soldiers?

It's an interesting question, and it's a question that's been asked a lot. I can't comment on American policy, but clearly they feel they require the services of a professional private security company to carrying their civilian engineers to and from site, and we're very, very delighted to be able to offer that service to them. …

But there are just people, Joe Blow sitting at home, looking at this program and saying, "Why aren't our boys protecting our generals?" You say they are replacing [you]. Is there a reason you're being replaced on that detail, a political reason?

Well, I wouldn't know if there's a political reason, and I won't comment on any politics. I'm a professional security provider. But what I will say is that the service that we provide is a very, very high-level service. The men are extremely well trained. They're all former military servicemen. They're all combat veterans, every single one of them. And the service that we provide is no less than [what] could be provided by an American team themselves.

And what I will allude to is the fact that the Americans would like to withdraw troop members. And perhaps it is part of their policy to reduce troop members and replace them with private security contactors. I have no idea. It's just my personal feeling. …

Tell me a little bit about driving the roads here. What are the challenges that you face?

Well, I think that you'll be able to show that on your own footage that you've taken. But what I will say about the roads is the roads are potholed, which is a challenge. There are no road markings on any of the junctions. There are no traffic lights that work anywhere.

Are there any laws?

There are not any laws that we would recognize. … There's no mechanical reliability checks on any vehicles here that is legally enforced. There is no insurance in place that's legally enforced.

So they are some of the challenges that we face on the road. And not only that, there has been an influx of cars since the fall of the former regime, and anybody that can get hold of a car will drive one. And they are some of the challenges that we face.

You've mentioned that [you're] accountable to the contract to the client?

Yes, of course.

Are there Iraqi laws that you are liable for?

The Iraqi lawmaking process has only just begun, and that is why we're following the rules and regulations of the client. I'm sure that over the coming years, as the country stabilizes, the laws will be developed. But at the moment, there isn't a recognizable law that we could compare to our own in the United States or Europe.

One reason for doing this, one reason for subcontracting to a private security contractor, would be that you could really provide the service more cheaply and better. Do you think that's the case?

Well, I'm not a financial accountant; I'm an operations director. I'm not sure whether it's cheaper or not. What I will say is that the salary that is paid to the private security operators is higher than is paid to an American serviceman. However, there aren't the long-term costs that you would have, such as pension cover, long-term disability cover that's covered by private insurance, and such like that the American Army would face with their own soldiers. So it could be cheaper. I don't know. …

Who are these guys that do this work for you? Tell me a little bit about some of the guys you have, what you look for, what makes them special.

The men that we recruit are all former servicemen or former policemen. Typically they've served for 12 years in their parent organization before they left it and became a civilian. We capitalize on that. Our recruitment doctrine specifically targets former servicemen. …

We put them through a training package which is five days, and then after the five days, if they pass the operation performance tests, then they're deployed on a security escort term. If the guy can't pass his operation performance tests, we will then send him home.

Do you have trouble with sort of the cowboy characters? How do you weed them out?

Our recruitment is done in the main by word of mouth. Sometimes we do take CVs on the open market, but in the main, it's done by word of mouth. And a man that wants to recruit simply will be his friend who he served with in his former military career or his former law enforcement career. He will then come to the company, and that guy will act as his sponsor. And we feel that a man will not recruit and have serve alongside him a man that he doesn't trust and have faith in.

And that doctrine has served us very, very well. We have very, very few disciplinary problems. We have very, very few problems with people who are not what they purport themselves to be on their CVs.

We subscribe to the attributes of the British Army, and that is that a soldier or a man that has left the British Army is being recruited … and indoctrinated in him are the characteristics of humor, a good sense of humor, courage, reliability, honesty, integrity, and perhaps the most important one is humility. We don't have any place in this organization for Rambos, men with large egos. And in fact, it's quite the opposite. None of us want to serve alongside those men. So if those men do come out of the woodwork, typically we'll serve 30 days' notice on them and get rid of them. If they're particularly offensive, well, then, we will terminate them for cause.

What do you say to the guys who would say, "Oh, you guys are just a bunch of mercenaries; you're just war profiteers"?

… We are providing a security escort service which is not really any different to a cash-in-transit or an armed high-value transit service. We're not mercenaries at all. And we are registered in every country that we have a footprint [in] with the necessary authorities. And we're a security provider of high-class security services, and also risk management services with security audit, security surveys, due diligence. And we are a security provider. We are not a mercenary-type company, and we actually find that term offensive.

So you think the industry gets a bad rap?

No, not over here in Iraq, no. Perhaps in Africa, some companies have earned a bad reputation. But Erinys is very proud and honored to be able to serve such prestigious clients as the Department of Defense, the United States Army Corps of Engineers and the other contractors I've alluded to.

Now, one thing that's different here than sort of a guy manning a Brinks truck is that you do have to be ready to use deadly force at times. This is a very difficult, challenging, dangerous mission.

Yes, it is. And that goes back to our recruitment doctrine of only recruiting seasoned combat veterans who are able to makes those decisions through results of their previous experience and previous training. It is a difficult choice that the men face when they're faced with vehicles that approach them at speed and won't keep back from the convoy, and they ignore the rules for the use of force.

And that's why we've recruited those people. I'm extremely proud of our service. And every single incident that we have taken part in, where there's has been a contentious issue, has been fully investigated. And the satisfaction has been provided to the claimant, to the client, and also to us as the provider of the service.

How often do your men actually have to use their weapons?

Unfortunately, the country is unstable, and we come into contact with the Anti-Iraqi Forces, where they attack us fairly regularly. It's truthful to say that we're attacked probably once or twice a week at the current time, throughout operations through the whole of Iraq. We've got 15 security escort teams across the whole of the country, and it is very distressing that the Iraqis choose to attack us, typically once or twice a week.

Do those incidents result in the deaths of Iraqis?

Unfortunately, yes, where the Anti-Iraqi Forces have attacked us from ambush positions where they've carried out an infantry-style maneuver against us, and we've had to defend ourselves in the withdrawal from the area. Unfortunately, we have had to kill Anti-Iraqi Forces in the pursuance of our duties, which is to protect the lives of our client. And not only that, it's very tragic that three of our own men have been killed, and their loss is greatly felt by us. … We've had, to my knowledge, four men wounded in contact, and we've had five of our men injured in road traffic accidents. …

Do you keep track, through reports, of when you engage in a battle how many Iraqis are wounded or killed?

Yes, we do. We have a very comprehensive, serious incident-reporting process. It's based on the military process. If we come into a situation where we are attacked by the Anti-Iraqi Forces, we try and send an immediate contract report to our operations centers that is then relayed to the infantry maneuver units. We then have to submit a preliminary serious-incident report within 12 hours of the incident, and then we have to continue with an investigation of the incident until the incident is concluded.

The incident report covers such things as the location of the attack; what the modus operandi of the attacking force was; what measures we took to defend ourselves; an estimate of collateral damage caused by ourselves, if there is any; an estimate of collateral damage caused by the Anti-Iraqi Forces, if there is any; and then recommendations. We then have a debriefing session, and we then look at the incident to see if there's any lessons that are learned. And we have already established that the Anti-Iraqi Forces have started to use motorcycles to carry out attacks, which previously, until two days ago, we had no records or knowledge of. And we've already promulgated down through our management team the change in the Anti-Iraqi Forces' tactics, techniques and procedures.

Do you have any aggregate figures or estimates on how may Iraqis were killed and wounded in these exchanges?

No, I don't, but I do know that in one particularly vicious contact which I alluded to last year, eight bodies were recovered. And then, very tragically, one of our own men was killed. It was a terrible loss of life, which is totally needless on both sides.

There is a Web site that records deaths of contractors. And it records today, when I looked at the Web site, that 229 private security contractors have been killed.

Those are just the ones reported, I guess. There's probably more than that.

They are ones reported now. My personal view is that more fatalities have occurred that are not reported, and I say that because some of my own colleagues have lost their lives over here; I didn't see their names reflected in that report. ...

Is there anybody that's evaluated the use of deadly force by U.S. GIs versus private security contractors?

Every single incident report that we file is evaluated, and there are constant reviews by the Department of Defense legal team and by our own legal counsel. And amendments to the rules for the use of force are suggested, and occasionally from time to time, it's changed. The actual changes are promulgated down, and then our men are rebriefed, and our induction training is changed accordingly. ...

I'm not asking you to name names here, but I would like to get some sense of the business space. Who's operating over here? How many companies? And they run from your rather large companies down to smaller ones? Give me some sense of the business space.

I'm pleased to do that. We believe that there are around 40 companies that are operating in Iraq that are known of. There are many more that are not known of, and they spring up out of the woodwork when they have an incident, and you hear of them. There are believed to be in the region of 18,000 to 20,000 private security contractors here in the country.

In total, that would make the second largest force in the country, next to the Americans.

Yes. Yes, it would.

It dwarfs the British presence, for instance.

Yeah. Yes, yes, it does. I think that it is fair to say that the private security contractors are, after the Iraqi army and the Iraqi police, probably the third largest pool of law enforcement or security escort providers or security service providers in the country.

What is very interesting is that of all of those companies, the cutoff date for them to be registered with the Iraqi Ministry of Interior is June 1, [2005], and we are only one of seven companies that is registered. We've been registered for some time, and we're hoping that the law will be enforced and the companies that are not registered will be sent home, and we will be able to carry out business development accordingly.

It's unlikely, given how much demand there is here, that only seven security companies could really expand fast enough to meet all of the needs of the country.

Quite possibly, but it's a business development that I'm sure that Erinys Iraq would like to capitalize upon. And we're very well placed to do so with our footprint, which covers the entire country. ...

Do you face any issues with coordinating with all these companies? ...

Yes, there are a lot of guys out there with guns, and it's very hard sometimes to differentiate between who are the Anti-Iraqi Forces and who aren't.

So you have trouble discerning between the insurgents and the security companies?

There have been difficulties in that area, not faced only by Erinys Iraq, but also by other companies. And it's generally caused by small companies that are not particularly well known. They have no representation through the Regional Operations Centers [ROCs]. They operate with a small contract, a small number of operators. They generally don't understand the raft of process, of policy, that there is in place to control and regulate what we do. They don't understand the rules for the use of force. They then drive into the convoy not understanding what it is that's being applied on the roads, and unfortunately, occasionally they bring themselves into peril.

In other words, they get shot at. One security company fires on another security company.

Unfortunately, that has happened occasionally.

Deadly?

I'm not aware of any incidents that Erinys Iraq have been involved with that have resulted in fatalities to other security providers.

That sounds like an accident ready to happen.

In my view, it is, and it is refreshing that the new government have decided to make June 1st the final cutoff date. And I would welcome the driving out of the ma-and-pa companies and the companies that are not professional in what they do. …

What's your worst nightmare?

My worst nightmare would be to see the efforts of the administration, the Coalition, fail. I personally would like to see Iraq free for the Iraqi people, and I'm very proud that we can contribute to that.

Is this a growth business for you, that you'd stay and provide site security for reconstruction if it ever gets going?

Well, Erinys Iraq is very firmly focused on the future. We're fully embedded with the Iraqi population. You've seen where we're sited here. We're outside of the International Zone. Now we have around 500 Iraqis on our books, and we fully expect in the fullness of time that as Iraqization becomes a reality and not a dream, that we'll be extremely well placed to carry forward our security service to the new Iraq when the Coalition forces leave and the country is stable. We are very, very much of the opinion that we will still be here, because we're so well embedded with the local population.

The American security companies don't hire Iraqis as far as I know, and you do. What's the difference?

It's very, very difficult to carry out any form of employee verification or reliability. There is no central authority for carrying out financial checks, background checks, all the sorts of reliability checks that you would want to carry out on your workforce, if you were a reputable company.

It's hard enough to make a phone call to a reference.

The way that we deal with it is that we have trusted Iraqis in senior management positions, and they recruit Iraqis in the same way that we recruit security contractors, expat security contractors, and that is by word of mouth, generally through family. And we do have a very large portion of former Iraqi servicemen serving on our guard forces. And again, we capitalize on that. They're all known to the senior management or family members of, and so far, that policy and that doctrine has paid off.

And no breaches of security?

No. We feel very confident and comfortable with our Iraqi compatriots. And we're very close to them, and we are very proud of them, and they're very proud of us. ...

March 31, 2004, last year, you had this event in Fallujah [where four contractors working for Blackwater were killed by insurgents]. In your view, could that have happened to your guys?

At that time, it could have happened to any security company. That incident that you refer to is a pivotal incident in security operations here in Iraq. And it was at that point that it was true to say that there was deterioration which changed the posture of all the security companies moving from soft-skin vehicles to armored vehicles. Body armor was worn. Weapons were then openly carried. And it was a defining moment in security operations for private security companies here in Iraq.

Not to be cynical about it, but in a sense, it was a bonanza for security, I imagine.

There is a bonanza or there has been a bonanza, but we're providing services, legitimate services that are required to ensure the reconstruction can go ahead, and there's nothing wrong with that. It's business development. It happens in all economies. It happens all over the world in any free capitalist country, and it's no different from any other business opportunity. ...

You had to armor your vehicles after that. You had to provide more firepower, perhaps? You had to take more precautions. Without commenting on what it costs, you had to provide more as an operations manager.

Yes, that's an inevitable effect of the cause, the cause being the aggressiveness of the Anti-Iraqi Forces. And it's true to say that directly after the fall of the previous regime, there was no threat in the way that it's presented to us now. Restaurants were open; bars were open; you could walk freely around the place. But currently that's impossible with the present security situation and the volatility there is in the country. And we're all very much looking forward to the day when the posture that we have and the equipment that we need to use as the tools to do the job can be downgraded. But at the moment, unfortunately, there's no sign of that happening.

But in a sense, just as journalists in a sense can thrive in wartime, you do, too. There's a lot of work to be delivered, and the business is going to have to shrink. What's going to happen to all these guys?

Well, you've asked me two questions. The first point is that there's not a war here. There's a very, very unstable security situation, but it's not a war. Erinys Iraq and Erinys International don't operate in war zones. We operate in countries that are unstable, and there are plenty of those around, and we provide legitimate security services, as any security company is able to do if they wish to operate in those environments, if they prepare themselves for it. And we do see ourselves as facilitators to corporates that wish to expand and provide resources from a country through fair trade. So we feel that we have a service that's needed and required.

The second point that you raised is what is going to happen to all these guys when the country stabilizes, and the analogy is what happens whenever there's a defense cut in any country. And that is that the soldiers, the airmen and the sailors get laid off, and the same would happen with all of the security companies here. The private security operators will get laid off, and they'll return back to the jobs and the careers they had before they decided to provide services here in Iraq.

So it's a difficult career for one of these guys?

Well, there's a very great catchphrase that I constantly remind my guys of, and that is that there is no security in security. And I'm under no illusion whatsoever that, were the contract that I'm servicing to fold, that I would be looking for a new job tomorrow. ...

The video that I've seen of the attack on one of your convoys outside of Mosul -- can you describe what happened there?

Yeah. The attack that we suffered was fairly typical of the attacks that are leveled against us and against all the security providers and against the coalition armed forces. There was a bomb. We believe it was an artillery shell placed in a car on the side of the road. ... As the vehicle drove by the car, the Anti-Iraqi Forces detonated it, which absolutely wrecked the vehicle. Because the vehicle was armored to level VI, our private security operators fortunately weren't killed. One of the guys was concussed and knocked out for about 20 seconds. They were brought under an absolute hail of widowing gunfire. Fire was returned to retrieve a very, very difficult situation.

The vehicle that was knocked out, the crew were forced to bail out of it. They were fighting for their lives for several minutes, until the Anti-Iraqi Forces realized that they would not be able to overwhelm the security team by superior firepower. They very quickly and efficiently broke contact with the troops in the contact area. If my memory serves me right, one Anti-Iraqi body from one of the Anti-Iraqi Forces was seen to be pulled into a car.

One of the insurgents.

One of the insurgents, yeah, yeah.

And was that a situation where you were forced to stand and fight. You couldn't have just picked up your guys and sped out of there?

We are only equipped to carry out defensive operations. We don't know of any offensive capability at all. We must not lose sight of the fact that essentially we are a taxi service, and we're equipped to defend ourselves if we're attacked. And our entire doctrine, all of our policies and standard operating procedures, all revolve around getting up and getting away from the area of threat, getting out of the contact area. We're not equipped and we don't train to carry out any offensive operations. And as a security provider, we wouldn't wish to take part in those kinds of operations.

I talked to one security contractor the other day who told me that there are times when you just need to stand and fight to take these guys down and that there are times when you have to seek them out. Would you have a comment on that?

Well, I think that it's typical of people over here that are not particularly well trained. They're not particularly well informed. They don't fully understand what their mission requirements over here are. No private security comes over here remitted to carry out offensive operations. We're all defensive. ...

And it comes back to the point that the small companies that are not well trained, and they're not well equipped, and they're not licensed and really shouldn't be here.

So it is recognized as a problem, though, that the industry needs a little more regulation.

We welcome regulation.

Do you think it's needed?

Yes, I think it is needed, and I've alluded to it already. ...

Tell me about this incident four days ago out in the west.

The incident that you refer to is with a joint venture partnership that we've got, and they were unfortunately attacked by Anti-Iraqi Forces. They had a very sustained gun battle defending themselves. They crossed over a motorway bridge. There was a bomb on the side of the road or buried into a hole in the road, and they detonated it as the vehicle went by. It knocked out the vehicle completely, and again they were brought under a hail of gunfire. Probably six insurgents were defending themselves, fighting for their lives.

They tried to hook up the vehicle that was knocked out and thrown out of contact while they provided defensive fire, which is a standard TTP [Tactics, Techniques and Procedures] that we have.

And the client's there the whole time?

The client was there the whole time. That vehicle was then knocked out by Anti-Iraqi Forces. It took a lot of hits. They then brought the third vehicle alongside, transferred the clients into the third vehicle, hooked up a tow rope to the second vehicle, and then towed it out, all the time putting down the suppressive defensive fire against the ambushes.

They just cleared the ambush area with no fatalities or casualties on our side, and then a car came from the opposite direction and opened fire on them as it drove by and did a drive-by shooting right beside the two vehicles with machine gun fire.

The vehicles then managed to exfiltrate from that and carried on down the road about 10 kilometers. And they realized that they were being followed by a car. They slowed right down. That car slowed down with them. They pulled in at the side of the road to invite it to pass. It wouldn't pass, and they were extremely concerned that they were heading into another ambush.

They were in a very weak situation, because the one vehicle was being towed. They continued down the road very, very cautiously, and sure enough, they were ambushed and brought under a third contact. Now they estimated there to be around six insurgents firing at them, and they had RPG-7 [rocket-propelled grenade] rockets fired at them. And they very, very rightly aggressively defended themselves with defensive fire and drove through the ambush position.

Fortunately, none of our guys were killed, or none of the guys from our strategic sister company were killed. And the ammunition expenditure was very, very high. And those attacks over in the west of the country are typical of the situations that we have unfortunately have to deal with.

And in Mosul?

We've had a lot of contact in Mosul. Some have been individual shootings, sniper-type shootings; some have been a couple of crazy gunmen just firing squirts; and some of them have been very, very well-organized and well-orchestrated ambushes.

Probably the most serious incident that we have faced as a company occurred last year on I believe it was the 10th of November, and very, very tragically for us. One of our South African security officers was killed, which is very, very sad. They were driving to Mosul, returning towards the town in a three-vehicle convoy, and they were ambushed, and an explosive device was fired on the side of the road. And they were brought under fire by probably four to six insurgents.

They drove several hundred meters, and a second device was fired, blasted off at them, and a second ambush party, and further on down the road, a third one; and further on down the road, a fourth one, and further on down the road, a fifth one. And they were trying to get themselves to an Iraqi police station where they could take cover.

One of the vehicles was knocked out, and the guys ended up fighting to the police station on foot, taking the client with them in one of the vehicles that was still running of the three-vehicle convoy. They got to the police station, and the poor police were terrified. They immediately ran away, and whilst they [were running] away, they locked the police station. Our guys couldn't get into it, and they barred the front entrance with a vehicle.

Our guys then, under contact, pushed the vehicle out of the way using their vehicle, went into the police compound and received the most almighty gun battle, which went on for an hour and a quarter. They were attacked by up to 60 insurgents. They were fighting for their lives. They used up all of their operation ammunition that they carry in their body armor. They broke open the emergency ammunition that they carry in the vehicles, and they were down to the last half a magazine and a few rounds between them before they were relieved by the American maneuver units.

[It's] fair to say that that particular incident is probably the most violent attack that has been leveled against us as a private security company. Our men fought for their lives with the most tremendous courage and bravery and absolutely under no illusion that had that been an action carried out by the British Army, that those private security officers, had they been private soldiers, would have been awarded the highest gallantry awards that there are available. And it was an extreme situation. ...

To give you some idea of the violence of that attack, the range of the contact started at about 100 meters, and it ended with the intervention of the American maneuver unit at a 40-meter range. ...

Do you have direct contact with the U.S. military when you're out there?

No, we don't have direct contact with them. We're not equipped to have direct contact. We're not part of the American armed forces.

Do they know where you are?

Yes, they do know where we are. At each of our locations, there is an Erinys Iraq Operations room which is manned with HF, VHF radios, Iridium and Thuraya satellite telephones, so extremely well equipped. And there is an operations center which is manned by one of our competitor companies. ...

That's Aegis.

That is Aegis. They man the Regional Operations Centers [ROCs]. We are carrying their transponders. And in a contact situation, we can now punch the transponder button which will allow for medical armed response or mechanical recovery to take place. At that time, that system was not in place, and it's only a very recent development. ...

What do you do when a team says they're just not going to go out there?

It's happened very rarely. I've never had a team that has refused to go out on a mission. Our men face very, very difficult choices in going out on the road. We can't force them. If a man wishes to withdraw his service, we have no difficulties with that at all.

That's one major difference between you and, say, a soldier in the U.S. Army.

Yes, it is. Of course it is, and that's because we're a private security company.

These guys can say, "The heat's too great; I'm getting out."

Yes, he can. We don't encourage that. We don't humiliate or embarrass a man who has been in that situation. One of our private security officers who left us very recently has been through 17 contacts. Now, I served in the British Army for six years in the Parachute Regiment. I served for 16 years in the Special Air Service Regiment, and I myself have not been through 17 contacts. That man went through 17 contacts in the space of a year, and I'm very, very happy for him that he has left safely and has achieved his objective, which is earning for his future and providing for his family. ...

The ROC, that's part of Aegis' contract. Has it been useful?

The service that they provide at the moment is a very useful service whereby you can call for medical support. You can call for military intervention through them. That's a useful service. I'd be very naive and also egotistical if I didn't acknowledge that that service is useful. Humility.

Yes, but this is a service that helps you after the fact, after you've been engaged. Does it prevent you from going down the wrong road at the wrong time?

Well, one of the major concerns that we do have -- and it's a concern that is shared by all the security providers here -- is that it could give them an unfair advantage over us. What we do is classified. We don't wish other security companies to know what our clients are, where we're operating and how we're operating, and a very valid concern that we have is that it could give them a competitive and a commercial advantage over us, because it effectively enables them to look inside every security provider here in the country. And it is a major cause of concern.

... But isn't the idea to protect the client at pretty much all costs?

Yes, it is. Our primary concern is to protect the lives of our client and to protect the lives of our own men.

So sharing information would be a good idea.

Yes, we can share information that is not of any commercial use. We don't share commercially useful information with each other. But it gives them an oversight of where we're operating, and it doesn't take very much business intelligence to then find out who our clients are and what our clients' needs and requirements are. And it's just a concern that we have. And personally I think that it's a very valid concern.

But let's just pose a difficult situation where you have intelligence on a certain route out here. You don't want to share that information with that company even if that company could potentially be hurt?

Personally I would like to see Erinys Iraq provide its own intelligence support services and provide its own support, which before the ROC became effective, we were doing. ...

So you'd like to provide it all yourselves and let the competition have to deal with --

Yes, we would. Yes, we would. Yes.

So in a sense, it's different than the military in that it's a competitive space?

Yes, yes, of course it is. And one of the other concerns that we have is that every serious-incident report that has to be filed has to be filed and a copy sent to the Region[al] Operations Centers run by Aegis. And again, it lets Aegis see which companies are suffering more than other companies, and it provides them with business intelligence.

If a company decided to pull out, which a company may choose to [do], the ROC would probably be one of the first companies that would know that.

So Aegis would have a business advantage. They would know who's pulling out.

... They would know very quickly if a security company had lost a contract, whether it had decided to withdraw its services itself. And it's just something that we're not very comfortable with. ...